Samsung to offer fewer smartphone models in 2015

SamsungSamsung has in the past offered a wide range of smartphones. It often seemed that there was a Samsung smartphone for each and every possible niche market out there. But things may be very different next year. With profits falling as competition heats up even more with the rise of new players, the company has revealed plans to cut its portfolio of smartphones by up to 30% next year. The company’s intentions were first revealed by Robert Yi, head of investor relations, and later confirmed by a company spokesman.

Samsung saw net profits drop 49% in its fiscal Q3. Its smartphone business saw operating-profit margins came in at only 7%, the lowest they have been since the end of 2008 (and before it released the first Galaxy S smartphone). Company executives vowed that they would improve the efficiency of operations to return to “a sustainable double-digit percentage margin” next year.

One of the moves planned will the see the company increase “the number of components shared across mid- to low-end models, so that we can further leverage economies of scale.” If so, not only may there be fewer devices but they may also share many common specifications.

The move to fewer models should also make it easier for Samsung to manage both inventory and its supply chains. It may also be able to cut down on the R&D costs necessary to develop all these devices.

Samsung did not provide any details about the exact number of models that will be cut and which specific ones they will be.

Source : The Wall Street Journal